Recently someone asked me about the market for renewable energy in Bulgaria. I wrote the following in response:

In fact

Bulgaria

had very strong potential for renewable energy up until recently, but changes in two laws over the last several weeks have made the situation much less attractive for investors. Some of these changes were already being considered by the Parliament or the Ministries at the time of the announcement about Toshiba, which was one of my reasons for suspecting that the announcement regarding Toshiba was false.

The first event was the Parliament’s adoption on 21 April 2011 of a Law on Renewable Energy. Here is the text of the new law:

Закон за енергията от възобновяеми източници

http://dv.parliament.bg/DVWeb/fileUploadShowing.jsp?&idFileAtt=103948&allowCache=true&openDirectly=false
http://www.parliament.bg/bg/laws/ID/11317/

http://www.lex.bg/bg/laws/ldoc/2135728864

http://www.theplan.comeze.com/14G7.pdf

Under the new law the government will change the feed-in tariffs (FITs) for new plants year by year, and plants that do not succeed in getting a place within the annual quota will receive a FIT on a case-by-case basis based on their construction costs. In addition there is now a fee (see Чл. 29) when developers apply for a grid connection, though it is not very high. See the following articles:

Bulgaria's New Renewable Energy Act Cools Down Investors' Hopes

21 April 2011

Bulgaria approves a new law on renewable energy

26 April 2011

Shocked Investors: New Law Shatters Bulgaria's Renewable Energy Sector

4 May 2011

The variability of the FITs is referred to in Art. 31, paragraph (1) of the law, which would translate as follows:

“Electricity from renewable sources is purchased by the public provider and end-suppliers, respectively, at the preferential price, set by the DKEVR, in force at the date of the act of findings for the completion of the energy facility pursuant to Art. 176, par. 1 of the Law on Spatial Planning.”

The second event was the Parliament’s adoption on 11 May of a number of amendments to the Law for the Protection of Agricultural Land. Here is the text of the amendments:

Закон за изменение и допълнение на Закона за опазване на земеделските земи

Although the draft of the amendments that circulated last year would have excluded both solar and wind power from land of categories from 1 to 4 (i.e., all agricultural land), and in February the Minister of Agriculture and Food proposed publicly that they should be excluded from all land of categories from 1 through 8 (which would even include most of the unfertile land), in the end the government adopted the amendments on 21 April in a form that excluded only solar, and only from land of categories 1-4 (agricultural land).

The relevant exclusion is found at Art. 7, para. 2, which would translate as follows:

“(3) construction and/or expansion of facilities for production of electricity from renewable energy using photovoltaic (solar) systems, except when the production of electricity is for one’s own use, is permitted on non-irrigated arable land of the fifth to tenth categories or uncategorized land.”

See the following articles (only in Bulgarian, I have not run across any in English):

Дискриминация спрямо фотоволтаичната технология съзират от БФА

Публикуване: 09.05.2011, 15:55

Окончателно: Парламентът изхвърли соларните панели от плодородните земи

Последна промяна в 16:51 на 11 май 2011

Obviously the solar industry is not at all happy with this change. Although this change has not received as much attention as the new renewable energy law – perhaps because Bulgaria has a large wind association but to date has little photovoltaic capacity installed – it effectively kills all hopes of large photovoltaic plants such as that huge one of 250 MWp that Toshiba was rumored to be planning, or even the modest one of 10 MWp that the company had already received approval for.

There is also a third event, which occurred last year. On 22 July 2010 the Parliament adopted amendments to the Water Law. The amendments can be found here:

Закон за изменение и допълнение на Закона за водите

http://www.parliament.bg/bg/laws/ID/10052

http://new.lex.bg/en/laws/ldoc/2135692090

The amended law can be found here:

Закон за водите

http://www.bd-ibr.org/files/File/500-Zakon_za_vodite.pdf (as amended through 6 August 2010; 139 pages, 10.5 MB)

http://rzi-smolyan.com/NormativhaUredba_files/ZV.doc (as amended through 5 April 2011; 143 pages)

http://www.dker.bg/files/DOWNLOAD/zv.pdf (as amended through 5 April 2011; 143 pages)

In the act adopted on 22 July 2010, § 63 creates in the Water Law a new Art. 118g, which reads as follows:

"Art. 118g. (1) The withdrawal of surface water for electricity generation is not permitted:

1. in cascade structures for derivation and run-of-river hydroelectric plants; …”

According to the following articles, this and other changes to the Water Law (such as Art. 156a) have made it very difficult to build hydroelectric plants in protected areas of Bulgaria, a change which threatens many small hydro projects that had already received permits: